Fractional shares allow investors to purchase a portion of a stock rather than a full share, making high-priced stocks accessible even to those with smaller investment budgets. This option is especially appealing for new investors looking to diversify their portfolios with less capital. A growing number of brokerages now offer fractional share trading, each with its own benefits, fees, and features.
Below is a detailed comparison of popular brokerages like Fidelity, Robinhood, Vanguard, Charles Schwab, as well as other noteworthy options like M1 Finance, SoFi, and Interactive Brokers.
Comparison Table of Fractional Share Brokerages
| Brokerage | Fractional Share Availability | Fees | Minimum Investment | Trading Platform | Other Features |
|---|---|---|---|---|---|
| Fidelity | U.S. stocks and ETFs | $0 commissions | $1 per trade | Web, mobile app | Dividend reinvestment for fractional shares |
| Robinhood | U.S. stocks and ETFs | $0 commissions | $1 per trade | Web, mobile app | No minimum balance, cash management feature |
| Vanguard | Limited to reinvested dividends | $0 commissions | None for reinvested dividends | Web, mobile app | Ideal for long-term investors |
| Charles Schwab | S&P 500 stocks (via “Schwab Stock Slices”) | $0 commissions | $5 for fractional shares | Web, mobile app | Comprehensive research tools |
| M1 Finance | U.S. stocks and ETFs, customizable portfolios | $0 commissions | $1 for fractional shares | Web, mobile app | Automated portfolio rebalancing, “pies” |
| SoFi Invest | U.S. stocks and ETFs | $0 commissions | $5 minimum investment | Web, mobile app | Free financial planning sessions |
| Interactive Brokers | U.S. and international stocks | $0 commissions for U.S. stocks | $1 minimum investment | Web, mobile app | Access to global markets, advanced research |
Note: Information on fractional share availability, fees, and features may vary over time. Be sure to check directly with each brokerage for the latest details. Additional post.
Detailed Breakdown
Fidelity
- Strengths: Fidelity’s low $1 minimum investment, $0 commissions, and availability of fractional shares for U.S. stocks and ETFs make it a solid choice for new and seasoned investors alike. It also supports dividend reinvestment for fractional shares, which is ideal for those focused on long-term growth.
- Drawbacks: Fidelity is focused on the U.S. market, so if you’re interested in international fractional share trading, other platforms may be a better fit.
Learn more about Fidelity’s fractional shares
Robinhood
- Strengths: With no commissions and a minimum investment of $1, Robinhood is great for beginner investors. Its user-friendly app makes buying fractional shares simple, and it also has a cash management feature, allowing users to earn interest on uninvested cash.
- Drawbacks: Robinhood lacks advanced research and charting tools, which might be limiting for those seeking more robust resources.
Explore Robinhood’s fractional share options
Vanguard
- Strengths: Vanguard offers $0 commissions on most trades and is known for supporting long-term investors. Fractional shares are only available through dividend reinvestment, making it best suited for those reinvesting dividends rather than purchasing fractional shares directly.
- Drawbacks: The inability to buy fractional shares directly can be restrictive if you want active control over your investments in partial shares.
Charles Schwab
- Strengths: Schwab’s “Schwab Stock Slices” feature lets you buy fractional shares of S&P 500 stocks with a $5 minimum. It offers a robust mobile app and access to extensive research tools, catering well to both beginners and advanced investors.
- Drawbacks: Fractional shares are currently limited to S&P 500 stocks, so those looking for a broader selection may find this limiting.
Learn more about Schwab Stock Slices
M1 Finance
- Strengths: M1 Finance is unique in allowing users to create “pies,” customizable portfolios of stocks and ETFs, which can be purchased with fractional shares. It also offers automatic rebalancing and $0 commissions, appealing to those who prefer a more hands-off, automated approach.
- Drawbacks: The focus on automation and preset portfolios may not appeal to those wanting more control over individual trades.
Check out M1 Finance’s pie-based investing
SoFi Invest
- Strengths: SoFi Invest offers a $5 minimum investment with no trading fees, making it accessible to beginners. The platform includes free financial planning sessions and other perks, providing value for investors seeking financial guidance.
- Drawbacks: SoFi’s research tools are relatively limited, which might not satisfy experienced investors looking for in-depth data.
Interactive Brokers
- Strengths: Known for its access to global markets, Interactive Brokers allows fractional share purchases for both U.S. and international stocks, with no commission fees for U.S. shares. Its advanced research tools and low fees appeal to experienced investors.
- Drawbacks: The platform’s complexity can be challenging for new investors, so it may be better suited for those with more experience.
Discover Interactive Brokers’ features
Conclusion: Choosing the Right Brokerage for Fractional Shares
- For beginners: Robinhood and SoFi are good choices, thanks to their low fees, intuitive apps, and accessible investment minimums.
- For automated investing: M1 Finance stands out with its “pie” system, allowing for automatic rebalancing and personalized portfolios.
- For global access and advanced tools: Interactive Brokers offers one of the best platforms for international investing and research.
- For long-term investors focused on dividends: Vanguard is ideal with its no-fee dividend reinvestment program.
- For comprehensive research: Charles Schwab offers extensive tools, making it a solid choice for both beginners and more advanced investors.
Each of these platforms offers unique features tailored to different types of investors, so choose the one that best aligns with your financial goals and trading style.
